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IN THE HIGH COURT OF BOMBAY
R.D. Dhanuka, J.
Rashmi Housing Private Limited – Appellant
Vs.
Pan India Infraprojects Private Limited – Respondent
Arbitration Petition No. 600 of 2011
Decided On : 17.12.2014
ARBITRATION - AWARD - CHALLENGE - GROUNDS - VIOLATION OF PRINCIPLES OF NATURAL JUSTICE - ADVERSE INFERENCE - EVIDENCE ACT, 1872, S. 114(G) - ARBITRATION AND CONCILIATION ACT, 1996, SS. 19, 34 - Held, the arbitral tribunal is bound to consider the principles of Evidence Act and the Code of Civil Procedure and has to follow the principles of natural justice. The learned arbitrator has not violated the principles of natural justice as urged by the learned counsel for the respondent. The learned arbitrator has while rendering the findings against the respondent on the issue whether logo mark appeared on the jersey or not has relied upon the CD which was a compilation of photographs which was proved best of evidence. Learned arbitrator has not relied upon the DVDs which were objected to by the respondent before the learned arbitrator and did not take the same on record in evidence. In my view there is thus no substance in the submission of the learned counsel for the respondent that the learned arbitrator relied upon any unproved documents or that the impugned award is in violation of principles of natural justice.
Fact of the Case:
The claimant had launched a cricket tournament called the Indian Cricket League (ICL) wherein both domestic and international players were participating. In the year 2007 the claimant hosted the Mumbai Champs (Cricket) Team during the ICL tournament held at Panchkula from 30th November 2007 to 16th December 2007. On 26th November 2007 the claimant entered into a Deal Memo with the respondent and appointed the respondent as the sponsor of the tournament for a consideration of Rs. 2 crores. Under the said Deal Memo the respondent had agreed to pay 25% of the said consideration at the time of signing of the Deal Memo. 35% of the balance amount was payable on or before 10th December 2007 and balance 40% was payable on or before 16th December 2007. The respondent paid a sum of Rs. 50 lacs to the claimant being 25% of the fee payable under the said Deal Memo upon execution of the said document by cheque. The term of the said agreement was one year i.e. from 30th November 2007 to 29th November 2008.
Finding of the Court:
The learned arbitrator has rightly interpreted clause 8 of the Deal Memo and has rendered finding that the terms and conditions of the said Deal Memo itself was recording a concluded agreement and execution of the separate Long Form Agreement was not mandatory, learned arbitrator has rightly not drawn any adverse inference against the claimant in not producing the said Long Form Agreement. There is no merit in this submission of the learned counsel for the respondent.
Issues: Whether the learned arbitrator has violated the principles of natural justice as urged by the learned counsel for the respondent or not.
Ratio Decidendi: Even in arbitration proceedings though strict provisions of Evidence Act and Code of Civil Procedure, 1908 are not applicable and though the arbitral tribunal is not bound by the provisions of the Indian Evidence Act and Code of Civil Procedure, 1908, the arbitral tribunal is bound to consider the principles of Evidence Act and the Code of Civil Procedure and has to follow the principles of natural justice.
Final Decision: Arbitration Petition is dismissed.
R.D. Dhanuka, J.
1. By this petition filed under section 34 of the Arbitration and Conciliation Act, 1996 (for short 'the said Act') the petitioner has impugned the arbitral award dated 29th March, 2011 passed by the learned arbitrator allowing the claims of the respondent in the sum of Rs. 1,74,72,000/- with interest at the rate of 18% per annum from the due date till the date of the award and thereafter at the rate of 12% per annum till payment and rejecting the counter claim made by the petitioner with cost quantified at Rs. 9,25,000/-. For the sake of brevity the parties to this petition are described in this judgment as they were described before the learned arbitrator. The petitioner herein was the original respondent before the learned arbitrator. M/s. Essel Sports Private Limited were the original claimants. Name of the original claimants were subsequently changed to Pan India Infra-projects Private Limited. Some of the relevant facts for the purpose of deciding this petition are as under: -
2. The claimant had launched a cricket tournament called the Indian Cricket League (ICL) wherein both domestic and international players were participating. In the year 2007 the claimant hosted the Mumbai Champs (Cricket) Team during the ICL tournament held at Panchkula from 30th November 2007 to 16th December 2007. On 26th November 2007 the claimant entered into a Deal Memo with the respondent and appointed the respondent as the sponsor of the tournament for a consideration of Rs. 2 crores. Under the said Deal Memo the respondent had agreed to pay 25% of the said consideration at the time of signing of the Deal Memo. 35% of the balance amount was payable on or before 10th December 2007 and balance 40% was payable on or before 16th December 2007. The respondent paid a sum of Rs. 50 lacs to the claimant being 25% of the fee payable under the said Deal Memo upon execution of the said document by cheque. The term of the said agreement was one year i.e. from 30th November 2007 to 29th November 2008.
3. Under the said Deal Memo the claimant had offered the brand logo marks on the jersey of the team. The respondent was given a right to use the team logo in any communication that brand may put out. The respondent was given a right to hold press conference with full team in attendance. In addition to the above referred rights, various other rights were given to the respondent under the said Deal Memo. Clause 8 of the said Deal Memo provided for arbitration. Clause 8 provided that a Long Form Agreement of the said arrangement shall be executed between the parties within 90 days. Until a detailed and Long Form Agreement was executed between the parties, the terms and conditions in the said arrangement shall continue to be binding and subsisting.
4. There were five matches played i.e. on 1st December 2007, 3rd December 2007, 7th December 2007, 9th December 2007 and 12th December 2007. The conclusion ceremony took place on 16th December 2007. By letter dated 4th December 2007 the respondent made certain suggestions to the claimant regarding their logo. It was suggested that their logo should be displayed on the chest and back of the jersey/sweaters being worn by the team players. The respondent stated that since their deal was signed at the last minute, they fully understood the compulsion of the claimant in not getting the logo of the respondent printed on the back in lieu of Mumbai Champs, there was need to implement the same for forthcoming matches from 7th December 2007.
5. By their letter dated 12th December 2007 the respondent recorded their sincere thanks for implementing suggestion contending letter dated 4th December 2007 and also recorded their pleasure to learn that the claimant had displayed hoardings about ICL Mumbai team at Bandra and Mahim and suggested for display of some more hoardings at various places in Mumbai. The respondent suggested the claimant to ensure that the name of the respondent as sponsor of Mumbai Team of
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